By Elliott Brack
Editor and Publisher, GwinnettForum
OCT. 22, 2021 | A proposal from the Biden Administration got bankers across the country, including those in Gwinnett, all hot and bothered this week. Proposed legislation would have required that the banks and credit unions give far more sensitive banking information to the Internal Revenue Service (IRS) about the bank’s depositors.
Included in the original proposal from the Administration was that the banks would be required to give depositor details on any movement of money into or out of their accounts exceeding $600. The current requirements of the banks is that they must report cash transactions over $10,000.
Monty Watson, chairman and CEO of The Piedmont Bank of Peachtree Corners, pointed out that the proposed new regulations went much broader. “The current requirement is that banks must report only CASH transactions over $10,000, or on any suspicious activity of an account.
Watson
“What the Administration proposed is that ANY cash movement over $600 be reported to the Internal Revenue Service. That would first be a violation of our customer privacy but would be a significant expansion of what is currently required. Customers may now write as many checks or withdrawals a day for $10,000 or more with no reporting required whatsoever. But we currently must report only cash transactions over this amount.”
Watson and other bankers across Georgia flooded Washington with howls about the proposed legislation. And it seems to be having some effect, as the Administration was reported to have agreed to withdraw the $600 limit, and move it back to the $10,000 level. The legislation now would also exempt payroll deposits for wage and salary earnings from having to be reported.
The purpose of the proposal by the Administration was to supply the IRS with more information so that the IRS could expand its program on cracking down and collecting unpaid taxes from the very rich.
Boutwell
Marshall Boutwell, head of the Peach State Federal Credit Union, was contacted in Warsaw, Poland where he was attending a meeting of credit unions. He is another banker upset over the direction of the Administration in this area. “This proposed legislation has a lot of unintended consequences. I know of no banker who is not lobbying hard against it. It is absolutely heavy-handed, Big Brother government.
“We already have to report interest that is paid to our members on their deposit account. We also monitor our depositor accounts for suspicious activity, which we report with our member knowledge. Furthermore, we have to report cash transactions which exceed $10,000, which we share with our members when we do.”
Boutwell added: “Not only that, but if someone is cheating on their taxes, they’ll find ways to get around these proposed new rules. But these proposed regulations would create an incredible volume of data and we don’t know yet what it would cost us to generate it.”
Another banker, who asked that his name not be used, maintains that the proposed legislation would be hurting the people the Biden Administration wants to help: the blue collar worker, who might be routinely paid in cash by his employer. He also adds that “Most people don’t walk around with boxes with lots of cash in it today.”
Administration officials are now working on a far more limited plan that the IRS would use on seeking out those citizens who cheat on their taxes. The Administration has estimated that beefing up enforcement of cheating on income taxes could amount to $70 billion a year.
- Have a comment? Send to: elliott@brack.net
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